Reference no: EM132613412

An entity incurred the following costs during the current year:

Cost of purchases based on invoices 5,000,000

Trade discount already deducted from invoices 500,000

Import duties 400,000

Freight and insurance on purchases 600,000

Other handling costs on imports 100,000

Commission paid to agents for arranging imports 200,000

Sales commission paid to sales agents 300,000

Salaries of accounting department 1,000,000

After sales warranty costs 250,000

Problem 1: What is the total cost of purchases?

a. 6,300,000

b. 5,800,000

c. 6,100,000

d. 6,600,000